Proposed elimination of tipped wage could close area restaurants

Mar 26, 2024 | Featured, Business | 0 comments

Tod Bowen of the Ohio Restaurant & Hospitality Alliance spoke about the tipped wage issue at an informational session at Kalahari hosted, in part, by Shores & Island Ohio and Ottawa County Improvement Corporation. (Photo by Sheri Trusty)


A Massachusetts-based nonprofit organization, One Fair Wage, is pushing an amendment to the Ohio Constitution that could have detrimental ramifications on the state’s restaurant and hospitality industry. One Fair Wage is gathering signatures to place a proposed amendment to the Ohio Constitution on the November ballot. The amendment would fast-track the starting wage of restaurant servers to $15 per hour and eliminate the tipped wage.

Simply put, the amendment would require restaurant owners to pay their servers a minimum of $15 an hour, and tipping would be completely eliminated by Jan. 1, 2029.

The Ohio Restaurant & Hospitality Alliance, in collaboration with Shores & Islands Ohio, Ottawa County Improvement Corporation, Erie County Chamber of Commerce and Greater Sandusky Partnership, hosted an informational session on the issue at Kalahari Resorts & Conventions on March 19. Tod Bowen, Managing Director of External Affairs and Government Relations with the Ohio Restaurant & Hospitality Alliance, provided insight into the tipped wage issue in Ohio.

Tod Bowen of the Ohio Restaurant & Hospitality Alliance is spreading the word about the impact a proposed amendment to the constitution could have on local restaurants. (Photo by Sheri Trusty)

Ohio employers can pay tipped employees half the starting wage. This is called a tipped wage, and eliminating the tipped wage would affect servers, restaurants and consumers.

Bowen explained that the Ohio tipped wage is already indexed to inflation, and servers in Ohio average a much higher hourly pay than the $15 minimum that the proposed amendment would require.

“Servers average $27 an hour, and some make as much as $41 an hour,” Bowen said.

Eliminating the tipped wage eliminates servers’ ability to earn higher pay, and it has the potential to eliminate jobs and close restaurants. Many restaurants, which already struggle with higher product and operational expenses, could not afford to survive under the weight of increased wage costs. That burden would be felt deeply in Port Clinton, where the hospitality industry slows considerably in winter.

“We would have to lay off people in the winter,” said Ala Carte Café Office Manager, Kim Fleenor, who has been employed at the restaurant for 34 years. “We have people who have worked here for years. Being laid off in the winter has never been a thought in my mind.”

Barb Muller, who owns restaurants in Port Clinton and Perrysburg, said she doesn’t think her businesses could survive if the tipped wage is eliminated. (Photo by Sheri Trusty)

If the amendment passes, Bowen said restaurants would be forced to find other ways to stabilize their profits. Some would increase menu prices, some would decrease the number of employees on their staff, and some would implement a service charge. Each option could keep customers away from their doors.

“If the law is implemented, I think people will not go out to eat on a regular basis,” Fleenor said. “We’d especially lose our winter customers, and we would have to close in winter.”

Barb Muller owns several restaurants in the area, including The ‘Que Barbeque and Brew, Nagoya Hibachi Express, Ciao Bella and The Sushi Room in Port Clinton, and Basil Pizza and Wine Bar and Nagoya in Perrysburg. She employs about 250 servers.

Eliminating the tipped wage has the potential to decimate Muller’s businesses.

“It directly impacts us as a business and our employees and customers. I can’t imagine being able to survive under these new laws,” Muller said. “Most importantly, our staff will be directly impacted. For a lot of our employees, this is their livelihood. This is how they feed their families.”

If consumers eat out less or restaurants close completely, supporting businesses will also be impacted.

“We use Gordon Food Service, and we use Tank’s Meats. Many businesses would be affected by this,” Fleenor said.

One Fair Wage must obtain 414,000 signatures by July 3 for the proposed amendment to be placed on the November ballot. If that happens, the Ohio Restaurant & Hospitality Alliance will bolster its opposition to the initiative. For now, they are spreading the word on the potential damage the changes could bring to the restaurant industry and to consumer’s recreational choices.

“We are leaving no stone unturned in our fight against this,” Bowen said. “This is bad for all Ohio businesses.”

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July 2024

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